If I were to sit for a test, and the question is: Describe 4 tips for a noob that can help improve trading.

There is always a time for reflecting on how one can improve in this crypto game.

I hodl, as well as trade some.

Today, it shall be on trading, or mastering trading as a noob.

There is so much for a noob to learn when it comes to trading, and these 4 tips come to mind quickly for me. I am still learning, so these are also reminders for myself.

If I were to sit for a test, and the question is: Describe 4 tips for a noob that can help improve trading.

My answers would be:

1. Set a stop loss and stick to it
   Since this is a trade, and not a hodl, the game plan is to sell when it reaches the target price. But what if it falls? Then it is better to sell at a lower loss than to sell at a big loss. If I fail to sell, I may decide to hodl. The issue here is the opportunity cost involved as the funds are locked in. Having a stop loss prevents ... bigger losses!

   The reason for tolerating small losses is that we plan to win in trades that have significant upside. That is, when we are right about our winning trades, the losing trades, even if they add together, are less of an impact since we would have gained more from our winning trade.

2. Enter the trade only when it has a significantly higher probability of upside
   We should only enter trades that we are convinced will have a substantial upside over a given time. This is where the use of various indicators will be crucial. In theory, the more indicators we used, the safer it will be. But that will also mean less trading over time, but that is fine so long as there is an overall stable winning rate.

3. Use a higher time frame
   New traders are excited by lower timeframes like the minute or hourly charts. The feeling of trading under these timeframes is like playing in a casino. Sure it excites people. But a retail trader is no match for bots that are used by bigger players. That is why, the predictability is poorer for data from lower time frames. The ups and down there can be highly volatile like a choppy sea!

   In contrast, using higher time frames like 4 hourly, daily or weekly charts reduces the negative effect of high volatility accompanied by that of lower time frames. Any indicator that is applied could make more sense when the volatility is reduced.

4. Learn about the indicators and setup
   The last tip is about learning to set up a system of trading. There are many indicators and setups traders used. This information is also widely available online. It is up to new traders to learn about them and then apply them.

   For example, people used Stochastic RSI, EMA, Fibonacci indicators concurrently and see if they point to the same decision before they enter the trade.

   Continuous learning is key!

If you were to answer the same question, what would be your answers? Why not write a post and share your knowledge.

P/S: This is not financial advice, always do your own research before investing.

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